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Bitchslapped!

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Do you want to see – in writing – what a bitchslap looks like? Of course you do, we’re all human and enjoy a bit of “entertainment”. Well, head over this morning’s Al-Wasat newspaper and read the Minister of Labour’s response to the Chamber of Commerce’s weedy objections to imposing the forthcoming labour fee. That, my friends, is a thing of beauty that I don’t think that the Chamber will awake from for some time to come.

وقال العلوي إن «المنجز الوطني الذي تحقق بخفض نسب البطالة في المملكة عبر البرنامج الوطني للتوظيف حظي برعاية من جلالة الملك ورئيس الوزراء وأفردت له موازنة مالية بمكرمة من لدن جلالة الملك، ولا ينبغي أن يتم تسخير هذا المنجز الوطني الذي منح البحرين مزيداً من الأمن الاجتماعي الذي بدوره ينعكس انتعاشاً اقتصادياً على جميع القطاعات لصالح التنصل من الالتزامات الوطنية تجاه المجتمع، بدلاً من أن تدعو الغرفة أعضاءها ليتولوا القيام بدورهم تجاه مجتمعهم ووطنهم بترسيخ هذا المنجز بالإسهام الفاعل بإعطاء المواطن الأفضلية في التوظيف. بل ولا ينبغي لأي كان أن يستثمر ارتفاع فائض الموازنة الحكومية والموارد المالية للحكومة بفعل ارتفاع أسعار النفط في اتجاه عدم فرض الرسوم الجديدة، وتجاهل أن الرسوم الجديدة لا ترقى بأيّ حال إلى مستوى رسوم العمالة الوافدة المقررة في أية دولة خليجية، في محاولة للتنصل من قيام القطاع التجاري بدوره تجاه مجتمعه».

I am impressed.

Why are they whining anyway? It’s a cost for God’s sake, and one that is applied evenly across the board; meaning that everyone will have this added cost so it is simply raising the floor a bit from which you add your margins. To go around and around and for so long about these charges is embarrassing for goodness’ sake. The only thing these objections do – considering that the Chamber is represented on the board of the Labour Reforms is further alienating the normal citizen from business people or even worse, entrenching the vision that we are simply vampires sucking the blood out of this society and giving nothing back.

What the Chamber should do is inspire more people to come into the business field, or at worst just work on attracting more members from the very same business community it purports to protect into their rolls. Did anyone ask for instance how many people are actually paid-up members in the Chamber for it to purport to represent the business community? I know that it is a very small percentage and although plans are in place to increase the membership, this should be its top priority rather than continuously unjustly complain about how much of a bad deal we’ve got.

This is embarrassing, it’s beginning to sound like the Chamber is nothing more than a nagging old hag. Get with the program and support the Labour Reforms initiative wholeheartedly. The money collected by them will only come to serve us in the near future by ensuring that Bahrainis get properly trained and employed. So what is there – legitimately – to complain about?

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Missed opportunities

Tell me something guys, if you were in a down-and-out situation and someone offered you a lifeline would you take it?

Of course you would, as most sane human beings. But if the situation is complicated with a sense of self-importance, of too much ego or with any of the plethora of psychological aberrations then even if you do take that lifeline, most would soon go into a usual self -destruct mode.

That’s unfortunately what seemed to what happened to Amor Setter. A person who is mired in debt, unpaid bills, theft of monies due to staff amongst other unsavoury things, given a lifeline to start a much needed film school in Bahrain with an almost iron-clad assurance of making money, has flushed this genuine opportunity and now – typically – is blaming everyone for not only the venture’s failure but herself.

The story, my friends, is that a Bahraini investor named Hijris Al-Shirawi has identified an opportunity to start a film school in Bahrain, especially that he already owns and operates a related media company, but as he recognised his own limitations, sought to employ people to run it for him and through his own research he thought that the best candidates to staff his venture with were available in South Africa. Through his research he fell upon a company offering training very similar to what he wanted to offer back home and found that its principal appeared to have all the right qualifications, so he set up a meeting to discuss the venture with it’s owner, Amor Setter.

Amour Elliot-Setter - wannabe film-maker

The results of that meeting is that Amor Setter agreed to relocate to Bahrain to offer the same courses in Hijris’ new school on the premise that a partnership between Amor and Hijris might be considered in time should the business blossom and become self-supporting. In the interim, both prospective partners will pay out of their own pockets for their expenses. Hijris has agreed, as a matter of good faith, to pay for the transport of Amor’s equipment to Bahrain in order for them to be used in the new school. As it transpired, Hijris not only paid for the transport of her equipment, but also for whole wardrobes full of personal effects which more than doubled the initial agreed costs. That should have rung the warning bells in Hijris’ mind quite audibly on its own, unfortunately due to his naivety he let it slide.

That lapse of judgement resulted in him being mercilessly being taken advantage of: he ultimately rented and paid for her villa, car hire and various other expenses over the next 2 – 3 months, the last of which was a demand for him to pay for an exclusive membership in the Novotel resort, hair, manicures, pocket money for a young son in South Africa, school fees and various other just as fantastic demands.

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New Toys!

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Have a look at these beauties guys:

New toys, the Sony HDV Camcorder HVR-Z1E and the HDV player/recorder HVR-M25E

These, my friends, are the Sony HVR-Z1E HDV Camcorder with the accompanying HVR-25E HDV player/recorder. I’ve had to wait for about a month to receive them. They finally arrived this afternoon. There are still a few accessories still to arrive later this week.

I suppose I should now pull the finger our and make some movies!

If you know anyone who wants to do a corporate or industrial video, give them my details please. I’ll buy you a cup of your favourite brew if you do with my thanks.

Me sooo happy! 😎

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The Bahraini Economy Excels

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I’ve got some Good News™ for you guys:

As an exercise in deflating pessimism it couldn’t have been better. The merchants of doom and gloom have been predicating their comments on declining oil reserves for years, with the implicit rider that the entire economy of the kingdom was destined to plummet down a slippery slope.

Now a report from the Central Bank of Bahrain (CBB) has left the pessimists spluttering and bereft of ammunition for the slightest tale of woe. Oil revenues are up. Inflation is minimal (something Dubai and Qatar would love to be able to claim). Exports are up. The trade surplus is up. The heart and homeland of banking in the Gulf and beyond is riding the crest of a wave and – perhaps best of all – the vast majority of the new jobs that have been created in the past 12 months are in the private sector.

The report, a first of its kind issued on August 16, showed that the kingdom’s gross domestic product (GDP) increased by 7.1% in 2006, driven by strong local and foreign investment, a record high current accounts surplus and an expanding private sector.
Oxford Business Group – Bahrain Volume 117 – 24 Aug, ’07

That, my friends, is Good News™ and it will be a lot gooder when that percolates down to the rank and file.

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Big business delays progress of democracy in Bahrain

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Firm vows to bear 1pc cut in salary
The Bahrain National Holding Company announced yesterday that it is to bear the costs of the government’s one per cent unemployment benefit tax for its nearly 200-strong workforce.

Officials yesterday said the firm had already begun making deductions from staff salaries last month but that following a thorough management study, it was decided to ease the burden on employees. This includes employees of both of its fully owned subsidiaries, Bahrain National Insurance and Bahrain National Life.
more…

This is a message to those companies whose officers are deluded by their “magnanimous gesture” of bearing the 1% unemployment benefits contribution on behalf of their employees: You are not doing Bahrain any favours, what you are doing is simply delaying the country’s progress in the long term.

We’ve all heard that idiom which says that the only two constants in life are death and taxation. Taxation has been hidden in our Gulf countries and has been named anything but its real name because of the prevailing thinking is that taxation is bad and we must promote our countries as tax havens. This is not a good thing. Whether we like it or not, we will have to pay income and corporate taxation sooner or later, and the sooner we get used to paying taxes, the better we will be.

Why? Because our lethargic and submissive culture will gradually change. When one pays their hard-earned cash into the government’s coffers, that person will ultimately demand to know how that money is being spent with all that simple demand entails: ultimately, a proper political representation and a proper voice in how our governments are run.

What these “do gooder” companies are doing is nothing but robbing us of that proper representation chance and delaying its onset by several years if not decades.

They should most certainly re-examine their position and think of the long term competitiveness and political stability of the country rather than providing this silly and unneeded momentary band-aid which will do nothing but prolong a much needed healing process.

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Vote for Bahrain!

Guys, there is a “spot poll” on ArabianBusiness.com which asks which is the best ME city to do business in; Bahrain is currently #2 at 27.9% after Dubai at 46.7%.

Could you please go there and vote (for Bahrain of course!)

Come on.. it’s a good gift for our lovely country on her Independence Day! Go on and do it!

update 16 Aug, ’07 – poll has closed now with Bahrain topping 60%, WE WON! Congrats Bahrain and thanks to everyone who voted for our fair isles.

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Making sense of nonsense

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Whenever I feel down, out of sorts, bored, whatever, and I need a lift-me-up boost, the Bahrain News Agency never fails to provide a copious amount of fun!

Like this:

CLAMP ON BOGUS COMPANIES
MANAMA, AUGUST 12 (BNA) — A COMPANY REPRESENTING BOGUS COMPANIES IN BAHRAIN THAT PROVIDE SERVICES OVER THE INTERNET HAS BEEN CLAMPED ON BY THE INDUSTRY AND COMMERCE MINISTRY IN COOPERATION WITH THE CENTRAL BANK OF BAHRAIN (CBB).
THESE UNLICENSED BOGUS COMPANIES USED THE BAHRAIN-BASED COMPANY AS A CENTRE FOR COMMUNICATIONS, A MINISTRY STATEMENT SAID. INQUIRIES BY REPRESENTATIVES OF THE MINISTRY AND THE CBB SHOWED THAT THE COMPANY PROMOTED FOR 13 BOGUS COMPANIES WITH FINANCIAL, COMMERCIAL AND INVESTMENT ACTIVITIES THAT REQUIRED LICENSING FROM THE CBB, IT SAID. THESE COMPANIES ARE A THREAT TO THE RIGHTS OF CLIENTS AND THE STATUS AND REPUTATION OF BAHRAIN, THE STATEMENT ADDED. THE MINISTRY WARNED CITIZENS AND RESIDENTS AGAINST DEALING WITH SUCH COMPANIES AND URGED THEM TO PROVIDE AUTHORITIES WITH ANY INFORMATION THAT COULD LIMIT THEIR SPREAD.
bna – 12 Aug, ’07

If your head is not spinning yet from the ALL CAPS or the not-so-important fact of making no head nor tail of the above bit of news, then you should really quit drinking and flush that joint and start concentrating.

My take on this is that the Central Bank was caught with it’s collective pants down; they licensed a company which probably went bankrupt but stashed a whole load of cash in their own untouchable accounts and left all the investors struggling for breath and to fend for themselves against creditors or with worthless paper.

THE CBB SHOWED THAT THE COMPANY PROMOTED FOR 13 BOGUS COMPANIES WITH FINANCIAL, COMMERCIAL AND INVESTMENT ACTIVITIES THAT REQUIRED LICENSING FROM THE CBB

And the CBB has the temerity of “protecting the face” of those companies by not naming them? Because, ehm, we don’t do that sort of thing. Haram wallah, a shame and it should be hushed as it might be construed that we are going “against national norms” and all that sort of thing. Brilliant.

THESE COMPANIES ARE A THREAT TO THE RIGHTS OF CLIENTS AND THE STATUS AND REPUTATION OF BAHRAIN

I read this as covering the tracks of the thieves and who would do that unless that old idiom “thick as thieves” stands true in this situation?

THE MINISTRY WARNED CITIZENS AND RESIDENTS AGAINST DEALING WITH SUCH COMPANIES AND URGED THEM TO PROVIDE AUTHORITIES WITH ANY INFORMATION THAT COULD LIMIT THEIR SPREAD.

Ah, I get it now. The government is encouraging us citizens to sharpen our divination skills in telling fortunes and reading coffee sludge as well as the art of Advanced Government Gobbledigook Interpretation in order to ascertain and divine the names of the companies and individuals involved. So if we fall into their traps again, who is to be blamed other than ourselves? The government after all has made it amply clear that we should not deal with these unnamed bogus companies.

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Lightspeed’s response and other points

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I’ve had a good long chat with Shaikh Abdulla Al-Khalifa, the MD of Lightspeed this afternoon where he crossed some tees and dotted a few eyes. As one might expect, he was not forthcoming as far as the money aspects of the issues (overhead per customer, investment levels, margins, forecast number of customers) but he was adamant that with the backing of big operators like France Telecom, which majority owns Jordan Telecom which in turn majority owns Lightspeed, they will have the financial wherewithall to pull this and future packages and services (triple-play).

Therefore, he said, whenever there is a reason to buy more bandwidth there will be no hesitation in doing so, and in fact they have already planned for that eventuality. It is interesting that he also stressed that they will buy from BIX and “from any other infrastructural provider who comes into Bahrain” – which is something I know that is being worked on, but that’s another topic.

As for the resilience and reliability issues, he was comfortable enough with the signed SLAs with both Batelco and BIX. I am not; however, as I could not find any audit requirement by independent watchdogs to ensure that Batelco and any other operator actually abiding by published and contractually agreed contention ratios. From my own bitter experience I can tell you that I feel that the contention ratio in my area could not possibly be what is promised; it possibly is much higher owing to how slow the connection gets in both the office and at home.

When I pushed for me to see their audited financials, he was a bit bashful and said that in reality they have only been in operation for about a year and although they do have audited reports, their costs and overheads where all lodged with the TRA. I could not find annuals on their website, which is another criticism I had put to him as I believed that their website is at best very amateurish. He agreed and promised that another nicer version is being worked on which should be launched by year’s end, maybe sooner.

There is no reason for me to believe that they are playing games; it is not in their best interest to be sure and what they are doing is slowly chipping away at the monolith. Their ability to be the first in the market to offer this service from the 1st of August, while others can only apply for the service on that date was due to Lightspeed being the selected beta tester for the service – according to Shaikh Abdulla. In fact, he said, they have been testing the service on a limited basis for quite a while, but the TRA and Batelco’s requirement for “belt and braces” by double testing everything before launching the product delayed them from coming to market even sooner.

As to the financial stability and some operators still owing money to BIX/Batelco he doesn’t see an issue in this at all and I partly agree; BIX provides a 45 day credit facility to its customers while Batelco’s terms are generally 30 days, so that actually and practically lumps all operators in the same basket as far as owing moneys to vendors. I agree that it is good business practice to utilise the full credit period given – why would you give your money away before you really have to while you can invest it however briefly in other pursuits?

Shaikh Abdulla also feels that the Batelco-mandated requirement of minimum registrants per month and a really stringent forecasting procedure could easily be reached and surpassed. He did not offer any specific numbers of customers already signed up to their service so far, nor was he forthcoming in disclosing their submitted forecasts. I somewhat hesitate to share his enthusiasm; however, but am more than happy to wish Lightspeed the best of luck in this regard.

The clauses I am talking about – by the way – are clearly stated in the TRA produced “Bitstream Service” description document of which I quote a few of relevant sections which you too might find interesting:

3. SERVICE TERMS

  • 3.1 Provision of the Bitstream shall be conditional on the Access Seeker agreeing to submit the following minimum aggregate number of Bitstream Requests for all Batelco Exchanges per month for each year of the provision of any Bitstream Service by Batelco to the Access Seeker:
  • (a) 192 per month in the first year;
  • (b) 128 per month in the second year; and
  • (c) 96 per month in the third year.
  • 3.2 Batelco will implement Bitstream Requests from the Access Seeker and requests for configuration and provision of connections from other Licensed Operators and from itself with respect to any Batelco Exchange in batches of 32, representing the number of ports on a DSLAM or MSAN equipment card in the Batelco Exchange.
  • and

    7. FORECASTING

    • 7.1 At the beginning of each calendar month, the Access Seeker must supply a forecast of the expected requests for the Bitstream Service in each month of the six month period following the date of the forecast, in the form required by Batelco from time to time.
    • 7.2 Subject to Batelco complying with paragraph 7.3 below, for each forecast made under this Service Description, the aggregate number of requests for Bitstream Services identified in a calendar month of the forecast plus the two following calendar months are a commitment to order those Bitstream Services. If the Access Seeker has not placed those number of requests by the end of the calendar month the Access Seeker shall pay an amount equal to three times the relevant monthly port charge for each request for Bitstream Services not ordered.
    • 7.3 Batelco will use all reasonable endeavours to adhere to the rollout plan for BEs at Annex 5 and will give the Access Seeker reasonable notice of any changes to that Annex, such
      notice period to be at least the same as any notice period by which any Batelco retail operation is notified of changes by any Batelco wholesale operation.

    I really have a problem with the above paragraph being titled “Forecasting” because normal forecasting or pipelining I am familiar with in my business is an exercise for a us – the customer – to provide the vendor with a non-binding best guestimate of foreseeable purchases so that the vendor could statistically prepare their production lines to fulfill the needs. Needless to say, vendors have developed quite sophisticated methods to forecast demand based on feedback they receive from their customers.

    With the above requirements it is hardly a forecast but a commitment to buy services and you would get penalised for it if you don’t order whatever you have forecast for the current month and the 2 months which follow, essentially you are giving them a quarterly prepaid cheque and if you don’t deliver, boy your ass is grass, to the tune of a penalty which is three times the port rental charge! I will leave you to do the math if a customer does not fulfil their numbers. Man do I salivate at the prospect of having salesmen whom I can treat like this, slavery would be a blessing for them I can tell you!

    As to the very important contention ratios which Batelco must abide by (by the description does not provide practical manners in which it could police this very important aspect of the operation)

    [TABLE=19]

    Of course the costs of providing these services which the operators will have to pay Batelco (note that these are not all the charges obviously, there are several more which are quite steep that the operators have to pay for the privilege of offering these services in lieu of Batelco, if you are really interested I can give them to you, suffice it to state that the pleasure of establishing a bitstream relationship will set you back BD50,701 – don’t you ever forget the BD1 in that figure! – but fortunately that’s a one time charge. You do pay a monthly relationship maintenance fee of BD1,067 for the honour, however, not forgetting the other infrastructural charges you will have already borne by investing in equipment not provided by Batelco nor BIX.)

    [TABLE=20]

    I would like to draw your attention to the 256kbps package which is arguably the one that most of the 50-60k ADSL subscribers in Bahrain have opted for. Note that Batelco sells this service at BD10 retail, but offers it at higher than that for wholesale! I hope I understood the figures wrong and wish to be corrected, but that in itself is unsavoury isn’t it? Apart from it being completely anti-competitive.

    All in all, there is much more to this issue than meets the eye. I fully realise that getting anything out of Batelco is akin to wrenching a steak from the mouth of a hungry lion, but it has to be done, and if this is exercised by (now) smaller operators in the market, then so be it and I wish them all much luck. Anything that could takes a chunk of Batelco is good for this country. Generally.

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    Unlimited ADSL packages have come to town

    Finally, there is some movement as far as the internet connectivity is concerned. Lightspeed Communications, which is partly owned by Jordan Telecom, has announced unlimited ADSL packages for the home and office at cheaper rates than the current bandwidth-limited packages offered by Batelco; details of these packages are:

    [TABLE=18]

    If you go to their site’s tarriff page you will see a bright orange star next to the “promotional rate” but the page does not explain what that star is. It is fair to assume that it indicates some terms and conditions attached to that offer, but in the absence of printed explanations we have to wait for an official response, but unfortunately no response was forthcoming.

    Hot on the heals of Lightspeed though, Lightspeed’s supplier have started offering Unlimited access to their business packages with an appreciable discount too! I would not be surprised to find that Batelco will soon introduced either more reductions of tariffs for home users and/or new unlimited packages and that, my friends, will be very welcome.

    Is Batelco feeling the competitive heat? There are now many competitors in the broadband business: MTC Vodafone, Lightspeed, Neutel, Kalam, MENA Telecom and 2Connect amongst others, so Batelco most definitely is feeling the heat and Batelco being Batelco is responding of course. They do take competition very seriously and if history serves right, they will only move to provide better, faster and cheaper services when they have to.

    Lightspeed starts offering UNLIMITED ADSL packages ad

    They have now, I believe that the charges they levy on broadband access (both residential and business) are still high and I am absolutely convinced that ultimately they will be forced to reduce their tariffs to be more compatible with world standards, and more importantly, be reasonable enough for the local market to engender good internet based innovations.

    The numbers that the competitors are offering though do not seem very convincing, especially when you consider they essentially buy wholesale from Batelco and then resell it without having to invest in their own infrastructure but depend on that provided by both Batelco and BIX. This is legitimate business practice of course and done in true trader mentality. But the thing that I fear is that just like a lot of small traders, they over promise and under deliver.

    Consider for instance the packages recently announced by Lightspeed (shown above); their capacity is based on a 1Gbps port purchased from Batelco (bitstream service a lot of Lightspeed’s services would run on) which they hope to generate enough interest to fill. At the moment their contention ratio on that pipe is promised to be something like 15:1, but insiders tell me that in order for them to make any money off this deal, their business model is based on providing a contention ratio of 30-40:1. This essentially means that if you buy a 2Mbps contract from them, when they reach their break-even point you will probably experience much lower speeds! By that time of course Batelco might well have released much more competitive packages, or other entrants would have come into the market with good financial strength to carry their plans through while you are locked into that “star” that we can’t seem to find the explanation of.

    telecomms.jpg

    The financial strengths of both Lightspeed and Kalam specifically give rise to some concerns. My sources indicate that both companies have not paid their BIX bill for months now and are under threat of stop-service. Lightspeed also had to downgrade its bandwidth capacity with BIX because it simply cannot afford the bill and this happened after it has been taken over by Jordan Telecom!

    Lightspeed might have a bigger problem on its hands in a few months if it does not meet the “minimum customer connectivity clause” of the contract and if that happens, you can rest assured that Batelco will come down on Lightspeed like a tonne of bricks with hefty fines already designed in their contract. The repercussions – without the Jordan Telecom muscle – could very well be bankruptcy should they not take care of this particular problem.

    Still, residential packages as they have offered could be their ultimate salvation. But they are sitting on a knife’s edge and they have to manage it very very carefully. If they sell a lot of these packages and they ultimately find they have a lot of unsatisfied customers due to the high contention ratios they will shoot themselves in the foot. Actually they would have shot off the whole leg. It’s that serious ironically because customers in 8 – 12 months’ time will have a much bigger choice than that currently enjoyed.

    This is a similar situation – business wise, I am told, between Batelco and Kalam where the former who has been branded the latter as a “bad payer” with all the conditions that ensues on their relationship and ultimately customer base. There is nothing worse than falling foul of a business supplier. I hope they can re-capitalised (again?) in order to remove that particular stigma and be more creative in their offerings. We hardly hear of Kalam now.

    There are also those malicious rumours doing the rounds that a telecoms company has not paid its employees for 6 months! I don’t know about the employees themselves, but had that been me I would have chucked that company in a long time ago and wrote the unpaid salaries off rather than keep with the headache of “will I get paid this month.” Telecoms companies are not alone in this boat of course, other major media companies do suffer from the same, uh, variable salary pay days just to keep employees (and their personal loaning banks) on their toes.

    Which brings me to another question mark point here: Is it ego that is driving MENA Telecom or is it really good business sense? Why would anyone invest in a technology that has not solidified yet and why depend on a single vendor to take you down that path? Why invest such a huge sum of money in it without first testing the market properly or simply building a viable business case?

    Why would it invest the huge sum of US$60 million in a market whose best estimates of broadband users is 60,000 and the vast majority of whom are on the Batelco 10 Dinar package per month?! What and where is their particular market? Please tell me! Unless they wish to take on Batelco head-on in the broadband business but then Batelco is operating on completely depreciated copper while MENA is going for the ultra new WiMax technology! If they do get even 100% market ownership of that “huge” 60k user-base, where can they make their money? I doubt very much that they will make it from VPN or DVB services. I can understand that a few business customers (and by few I do mean few) going for their VPN solution, but as we do not have any media infrastructure to speak of in this country, I would be kind enough to them to assume that they actually copied their business solutions from the Motorola WiMax brochure rather than have conducted proper market research! Could they please give the salesman who sold them that “solution” my number? I am in desperate need of as good sales staff. Still, they will be successful. They’ve got KFH to hold their back and it won’t allow it to fail. Industry watchers think that MENA might have gone bankrupt twice already save for KFH’s deep pockets.

    So where does all of that leave us the consumers in this Jewel in the Arabian Gulf?

    It certainly gives us more options, entrants are now coming up with nice packages but unfortunately they are not very well thought out business cases as we have seen from the above, but one could be forgiven for seeing a similarity in this and “birth pains”. Ultimately the good will rise because of innovative offerings while others will just naturally disappear from existence. This is the nature of a deregulated market and that is what we should expect more of.

    What would really deregulate the market; however, is splitting Batelco into at least 2 businesses: one managing the wholesale which should own the infrastructure, while the other continue to offer the retail services. This will allow its retail operation to fairly compete in the market and with its own self. Rather than continuously being at loggerheads with the TRA for hiked prices offered to its customers and much more importantly allow new business entrants to come into the market and boldly provide new innovative services without having to worry that the rug will be pulled from under their feet at any moment.

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    The Housing Problem

    Bahrain 2030 Master Plan by SOM

    The topic du jure is housing. My friends Tawfiq Al-Rayyash is livid that one of his ex-colleagues at Al-Wefaq political society has suggested that Bahrainis should go vertical – we should be content enough to live in flats rather than houses – but in the process, Tawfiq also shares with us some juicy details of the inner workings of Al-Wefaq!

    Mohammed Maskati is teed off too, but from the angle that the Ministry of Housing has now put procedures in place that only those who earn less than BD900 in combined salaries (working couples) are now ineligible for subsidized government housing, and as he is fortunate enough to earn much higher than that limit, he feels that he is left unfairly out although Bahrainis are constitutionally guaranteed adequate housing and jobs.

    Guys, I understand your frustration but although I am thankful that I own a house, financed through sheer hard work over 15 years in business I was able to save the required down payment and plonk it down to buy it. It will be a while before I pay the off the loan, but I am happy enough to do so.

    The inability to buy a house of my choosing and the lifestyle that I wanted were actually the chief reason for me leaving Gulf Air all those years ago although I was earning much higher than the current BD900/1200 limits, I saw that “a salary” will never allow me to live the way I want to live. So I opted out and started my own business and that has been difficult to be sure, but the reward at the end is worth it.

    I am no where near the goal of self sufficiency and I am already seriously looking into ways to double my income. There is no way that I could do that by holding a job.

    My advice? Manage your finances and create and abide by a personal priority list. Read Ammar’s excellent pointers on managing your finances and start implementing them now. If you feel that you don’t have time and want to have that house NOW, then maybe you should think of creative business ideas (which are full time, part time for this just doesn’t work) and start making your “serious” money! But that’s just a pipe dream as businesses can very easily fail and do carry various risks. There is unfortunately no easy short-cut for you to take.

    Either way, I would rather not wait for a hand-out from the government – even though it is my constitutional right to have subsidized housing provided for me – and go out there and get it myself and that’s exactly what I did.

    But let’s put things in perspective: the housing provided by the government and its subsidies for this housing/land purchase/building/renting etc is meant specifically really for those with limited income and those who earn BD900 and above could hardly be called limited income! Those are well within “the middle class”. The issue then transforms into that person’s inability to buy a house or land to build on because of the prices involved. Well, let’s look into that: Bahrain Credit asks for 25% as down payment and they would be happy to finance for 15 years.

    I know in other societies, first time buyers are encouraged to buy small and then sell and move up the scale as their financial abilities become better. Taking this principal in mind, an average first-time house or flat would be in the range of BD50,000 – 75,000. The down payment required (BC KFH) would be in the range of BD12,500 – 18,750. If a young couple both work and save BD500 per month from their combined salary they would need just 25-38 months. That’s a reasonable timescale I think.

    If you would rather wait until you can afford to buy a BD500,000 house then you’d probably be ill-advised in doing so as the waiting period is far too long for most people and all that time you are waiting you’re paying rent which does amount to a considerable sum.

    The above, I think, is not the real issue though – but detractors are latching on to it because it is an easy to understand issue, they know the level of frustration associated with it and they also know that their audience will be receptive to what’s coming next, the real issues they want to tackle: absence of social justice, unequal distribution of land and wealth (pdf – 8.6MB – arabic), etc.

    Unfortunately, doing it this way brings passion into it and it becomes an emotive issue which robs it of its importance. These entangled issues should be separated and explained in a concise manner to people so that they can be realistically identified and addressed to seek resolution. Continuing to shout that “we don’t have affordable housing” and then point at the vast tracts of undeveloped land while the Ministry of Housing continuing to maintain that all but 3% of the land is available to it to develop for the public good (97% in private hands) just mushes up the issues.

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